IHSAN ALI SHAH, MEMBER TECHNICAL-III:----By this judgment, we intend to dispose of the above titled Appeal No. K-547/2025 filed by M/s. Muhammad Usman through Advocate Obaid Mirza against Order in Revision No. 26/2025 dated 26.03.2025 passed by Director Customs Valuation, Karachi in terms of section 25-D of the Customs Act, 1969 originating from Valuation Ruling No. 51/2025 dated 01.01.2025 issued by the Director Valuation Karachi under section 25A of the Act ibid.
2.    Brief facts of the case are that the Customs values of Polyester Filament Yarn were re-determined vide impugned Publication Valuation Ruling No. 51/2025 dated 01.01.2025, by the Director, Directorate General of Customs Valuation Karachi in supersession of an earlier Publication Valuation Ruling No. 39/2024 dated 24.01.2024. The values were made applicable as minimum threshold values for imports of the said goods into Pakistan. The petitioners, filed review petitions, assailing the higher customs values of "Polyester Filament Yarn" in the impugned Valuation Ruling. They argued that these values were higher than the actual market values. The petitioners challenged the veracity of the said change mainly on the following grounds:
a)    That the PYMA argues that the Directorate of Customs Valuation failed to follow the proper sequential valuation methods under Section 25 of the Customs Act, 1969, and disregarded the documentary evidence submitted by importers.
b)    That the Directorate's decision is inconsistent on one hand, it dismisses declared transaction values as fictitious, and on the other, it considers higher transaction values for assessment, which undermines credibility and principles, of fairness.
c)    That the Directorate rejected the transaction value method citing lack of information, without properly attempting to verify or substantiate the declared values, which contradicts the legal valuation framework.
d)    That the PYMA submitted compiled data on Chinese domestic market prices and explained necessary adjustments like domestic taxes and exchange rates, but the Directorate failed to acknowledge or consider these in the valuation process.
3.    The Review Petition was decided by the Director General Valuation vide a common Order in Revision No: 26/2025 dated 26.03.2025 through which the petition of M/s Tamoor Trading was also disposed of in the same manner. The relevant/operative part of the impugned order is reproduced below:-
6.    I have gone through the contentions of both the sides. The major facts of the controversy in the instant petition are as follows: a) the allegedly unrealistic determination of the customs values of the goods in question; b) the fixation of the values for the impugned goods disregarding the actual transactional values, and c) the alleged non-adherence to the sequential method of determination of value. These areas are discussed and evaluated as follows:
a)    The main controversy in this case revolves around the point weather local taxes are added in the values provided by CCIEl. This is a relevant consideration that requires attention in order to arrive at a definitive value for the impugned goods.
7.    In view of the foregoing, the impugned Valuation Ruling is remanded back to the Director, Directorate of Customs Valuation, Karachi with the following directions:
a)    The Directorate may look into and resolve controversy after giving ample opportunity of hearing to the petitioners.
b)    The exercise of reissuance of Valuation Ruling in these good be completed preferably within a period of four (04) weeks after issuance of this order; and
c)    The current Publication Valuation Ruling No. 51/2025 dated 01.01.2025 shall hold field till issuance of the fresh Valuation Ruling.
8.    The instant petitions filed in terms of Section 25-D of the Customs Act, 1969 are accordingly disposed of in above terms.
4.    Being aggrieved the petitioner M/s. Muhammad Usman has filed instant appeal on the facts and grounds as reproduced below:-
FACTS
a)    The appellant is a commercial importer of Polyester Filament Yarn and works and operates under the name and style of M/s. Mohammad Usman, and in the said capacity is registered with the FBR and Regional Tax Office.
b)    That the Values determined of Polyester Filament Yarn was determined through the impugned Valuation Ruling No. 51/2025 dated 01.01.2025 after applying a formula known as the Zubair Motiwala Formula and not based upon the dicta laid down by the Hon'ble High Court of Sindh in reported judgments PTCL 2014 CL 537 Sadia Jabbar v. FOP and 2016 PTD 702 Danish Jehangir v. FOP and 2 others.
c)    Thereafter the appellant challenged the impugned V.R before the Director General Valuation who vide Order-in-Revision No. 26/2025 accepted the revision petition of the appellant and remanded the case but failed also held that the impugned VR would be applicable till a new valuation ruling is issued.
d)    Hence the appellant was constrained to file an appeal before the Appellate Tribunal Karachi for a judicious decision.
GROUNDS
a)    That in the order-in-revision the respondent No. 2 has not disputed the veracity of the import value of the appellant goods nor the annexed documents were found fake or fabricated or even tainted resultant, he in fact accepted the value of the appellant goods as fair falling within the ambit of section 25(1) of the Customs Act, 1969. Consequent result of which is that the consignments imported by the appellant till to date are considered by him as fair without any exception.
b)    Apart from above, it is stated that the provision of Section 25 of the Customs Act, 1969 are to be followed in sequential manner baring certain exceptional cases where massive group under invoices is rampant. However, resort to subsequent method is not permissible without exhausting the sequence indicated in Section 25 as it would annihilate and terminate the spirit and essence of the transaction value which in the first instance has to be established as colorable and tainted. Section 25(13)(a) does not give unbridled and un fettered authority to respondent to play havoc with the provision of Section 25 ibid., thereby making them in-effective and redundant. Discretion has to be exercised within limits based on reason, rationale and fair play. It is specifically provided by the legislature in subsection (10) of Section 25 that subsections (1) (5)(6)(7)(8)(9) define how the customs value of the imported goods is to be determined by the customs. The method of custom valuation are normally required to be applied in a sequential order except reversal of the order of subsection (7) (8) at, the importers, request, if so agreed by the Collector of Customs as held in judgments 2008 PTD 1494 Messrs Toyo International Motorcycle v. Federation of Pakistan and 3 others, C.P. No. 2673 of 2009 of Sadia Traders v. FOP the Hon'ble High Court of Sindh W.P. No. 756/2010 M/s. Faco Trading and 45 others v. Member Customs, FBR and 2014 PTD 176 Goodwill Trader, Karachi v. FOP and others.
c)    That it is a prerequisite condition for the respondent to first determine that the value declared by the importer/appellant is not fair, rather manipulated/concocted and to proceed with it has been mandated upon him to communicate with grounds as enunciated in sub-rule (3) of Rule 109 of Customs Rule, 2001 by the respondent prior to determining value of the goods in question for levy of duty and taxes under section 25-A(1) of the Act. No communication or notice under section 26 of the Act was forwarded/served on the appellant, confirming that no cause or reason was available with the respondent for disputing the declared value and the said fact further stood proved from the fact that no evidential invoice as directed by FBR in para 78 of CGO 12/2002 of the period expressed in Rule 107(a) was supplied to the appellant.
d)    The respondent No. 1 has stated erroneously that transaction value method provided in section 25(1) was found in applicable due to absence of additional information the participant of meeting submitted documentary evidence to prove that their declared value was true transactional value. This is totally absurd opinion as the same is not supported by any tangible evidence or the provision of law. Resultant, he miserably failed to discharge the onus of establishing that the price declared by the appellant of his imported goods are not the transaction value within the meaning of Section 25(1) of the Act instead his consignment should be assessed with the application of determined value through the Valuation Ruling because this is not the correct approach instead based on inapt interpretation of Section 25 of the Act. The same view has been taken by the Hon ble Supreme Court of Pakistan and High Courts and Tribunal in judgments reported Customs Appeal No.K-249 / 2000/13372, Customs Appeal No. K-35//2002, Customs Appeal No K-1670/2001, 2005 PTD (Trib) 617, 1668/LB and 1669/LB of 2002, Customs Appeal No. K-1281/05, 1986 MLD 790 Karachi, PLD 1996 Karachi 68, 2006 PTD 909, 2002 PTD 2957, 2007 SCMR 1357 = 2007 PTD 1858, 2008 SCMR 438, 1992 SCMR 1083 and 2008 PTD 1250.
e)    That with the submission of the documents referred in above pars the appellant discharged initial burden laid upon him under Rule (1) of Rule 109 of Chapter DC of Custom Rules, 2001 and prices declared by him deems to be transaction value without any exception within the contemplation of Section 25(1) of the Act and Rule 113 of Sub-Chapter III of Chapter XIX Custom Rules, 2001. However, if the respondent had any reasonable doubt about the truth and accuracy of the declared value and he is of the view that the value of the goods, cannot be determined under Section 25(1) of the Act, recourse to secondary method of valuation has to be adopted, he has to communicate to the appellant in writing about the decision and the grounds for forming opinion in regards to the value. No such exercise was undertaken by the respondent as evident from the ruling. Hence, he was not empowered to adopt the secondary method of valuation.
f)     That despite of the fact that respondent was not within his right to discard preceding subsections of Section 25 of the Act, he did purposely, as evident from the expression of Section 25A(1) of the Act, jumped to the provision of subsection (5) of
Section 25 of the Act for determining the value of Polyester Filament Yarn. Ironically the ruling and the Order In Revision are completely absurd in regards to the fact that both the respondents relied on the prices CCFEI completely discarding the local tax i.e. Tax inclusive of that price mentioned in the international publication.
g)    Whereas it is notable that the Impugned Order suffers from inherent inconsistency and contradiction. While the Director General has allowed the Appellant's Revision Petition under Section 25D of the Customs Act, 1969, acknowledging the need for a re-evaluation by remanding the matter to the Director he ordered an unnecessary/ illegal direction that the existing valuation ruling shall remain in force till a new valuation ruling is devised this renders the allowance of the revision petition ineffective and meaningless. This contradictory stance undermines the very purpose of the revisionary powers vested in the Director General.
h)    The continued enforcement of the existing valuation ruling during the remanded proceedings will cause significant prejudice and potentially irreparable harm to the Appellant in terms that the Director, being bound by their own existing ruling, may not conduct a truly independent and objective re-evaluation of the appellants imported goods, thereby precluding a fair outcome of the remanded proceedings. This perpetuates the potential inaccuracies that the revision petition sought to address.
i)     That Section 25D of the Customs Act, 1969, provides a mechanism for the revision of valuation rulings to ensure their accuracy and fairness. The Impugned Order, by keeping the challenged ruling in farce despite acknowledging grounds for revision (through the remand), effectively frustrates the legislative intent behind this provision. The purpose of allowing a revision is to rectify potential errors, and maintaining the potentially erroneous ruling during the re-evaluation process defeats this purpose.
j)     The Impugned Order fails to provide adequate or any justifiable reasons for directing that the existing valuation ruling shall remain in force during the remanded period. Without a clear rationale, this direction appears arbitrary and without legal basis. The Director General has not demonstrated why the potential inaccuracies that warranted a remand should continue to govern the Appellant's imports during the re-evaluation process.
k)    The direction to maintain the existing valuation ruling may unduly influence the Director in the remand proceedings. Knowing that the Director General has explicitly ordered the continuation of the existing ruling, the Director may be hesitant to deviate from it, even if a fresh examination warrants a different valuation. This compromises the independence and objectivity of the remanded inquiry.
l)     The Appellant reserves the right to elaborate on specific errors of law and/or fact that may be apparent in the Director General's assessment, even while ordering the remand. If the Director General's reasoning for allowing the remand yet maintaining the ruling is flawed in law or based on incorrect factual premises, these will be presented in detail during the appeal proceedings.
m)   The appellant carves his right to add any fresh grounds at the time of hearing beside placing any valid incriminating evidence / documents
PRAYER
       It is therefore prayed to the Revisional Authority to allow the revision application by ordering that:
(i)    That the impugned Order passed by respondent No. 2 is nullity to law and may be set aside being void ab-intio. Hold that the Direction given by the respondent No. 2 to apply the valuation ruling till the respondent No. 1 re-determine the VR afresh is illegal void and ab initio.
(ii)   Direct the official of Clearance Collectorate be directed to term the import prices of appellant goods for levy of duty and taxes as transaction goods value enunciated in Section 25(1) of the Customs Act, 1969 and Chapter IX of Customs Rules, 2001 and for that the impugned Valuation Ruling be amended, in order to save the appellant from unlawful application of the Ruling, having nu nexus whatsoever with the quality of the appellant goods.
(iii)  Any other relief may deem fit and adequate.
5.    The Representative of the Respondent Department mainly stressed that the controversy will be resolved in pursuance of the impugned Order in Revision passed by the Director General Valuation.
7.    The leaned counsel for the above titled appellant orally reiterated the grounds taken in the memo. of appeals, however he forcefully pressed into service the following grounds specifically:-
(i)    The Impugned Order suffers from inherent inconsistency and contradiction. While the Director General has allowed the Appellant's Revision Petition under Section 25D of the Customs Act, 1969, acknowledging the need for a re-evaluation by remanding the matter to the Director he ordered an unnecessary/ illegal direction that the existing valuation ruling shall remain in force till a new valuation ruling is devised this renders the allowance of the revision petition ineffective and meaningless. This contradictory stance undermines the very purpose of the revisionary powers vested in the Director General.
(ii)   The continued enforcement of the existing valuation ruling during the remanded proceedings will cause significant prejudice and potentially irreparable harm to the Appellant in terms that the Director, being bound by their own existing ruling, may not conduct a truly independent and objective re-evaluation of the appellants imported goods, thereby precluding a fair outcome of the remanded proceedings. This perpetuates the potential inaccuracies that the revision petition sought to address.
(iii)  That Section 25D of the Customs Act, 1969, provides a mechanism for the revision of valuation rulings to ensure their accuracy and fairness. The Impugned Order, by keeping the challenged ruling in force despite acknowledging grounds for revision (through the remand), effectively frustrates the legislative intent behind this provision. The purpose of allowing a revision is to rectify potential errors, and maintaining the potentially erroneous ruling during the re-evaluation process defeats this purpose.
8.    We have heard the learned counsel for the appellant and the Departmental Representative. The learned Director General Valuation has recorded certain findings in the operative part of the impugned common Order-in-Revision No. 26/2025 dated 26.03.2025 which supported the plea taken by the petitioner. The importance of the issue raised has been acknowledged with reference to the point of local taxes added or not in the values provided by CCFEI. It has been further noted that the said issue required attention to arrive at relevant value. There are thus important actionable points flagged in the impugned order by the Director General; however after assigning importance and weight to the above area of concern the respondent has remanded the impugned Valuation Ruling back to Directorate of Valuation to resolve the controversy preferably within a period of 04 (four) weeks time, while the impugned Valuation Ruling No. 1972/2025 dated 21.02.2025 has been held to continue in field till issuance of the new valuation ruling.
9.    It is apparent from the above referred observation in the impugned "Order in Revision" that as such the Ruling has not been subjected to an exhaustive Review since redressing measures have not been taken by the Respondent as required under Section 25-D of the Custom Act, 1969 whereas these measures had to be taken within the review proceedings under the executive supervision of the Director General. In this connection it would be pertinent to refer to the authority and obligation saddled upon the Director General Valuation in the Review proceedings under Section 25-D of the Act ibid. The said section is reproduced below:-
       [25D. Review of the value determined.- Notwithstanding the provision contained in section 25A, the Director General Valuation may on his own motion or in pursuance to a review petition made to him within thirty days from the date of Customs may rescind or determine the value afresh].
10.  The bare reading of the aforesaid section shows that it does not envisage any appeal against the Valuation Ruling issued by the Director Valuation. It rather empowers the Director General Valuation to review the whole process through which value was determined by the Director Valuation. This Review is not akin to the Review filed against orders/judgement passed in appeals. Therefore the Director General is not an appellate forum; but is a reviewing authority and while doing so he is expected to accomplish the process. On filing of the Review Petition under section 25-D ibid, the available possibility for disposal of the petition by the Respondent D.G. Valuation is either to rescind the value determined or proceed to re-determine it afresh. Once short comings are noted in the Review proceedings it is incumbent upon D.G. Valuation to either rescind the Valuation Ruling or embark upon the valuation process afresh and reach conclusive redressal to ensure that short comings stand removed. It is possible that after detailed run through of the process the resultant values and ancillary measurements/conditions arrived at might be the same, but all this has to be duly reflected in the Review Process and recorded in the order. However in any case it calls for proper implementation of the valuation process and the Order in Revision thus passed should offer substance and discussion in the matter before arriving at the findings on values/items so disputed. The learned Director General has clearly alluded to the controversy highlighted by the petitioner. The relevant part of the impugned order is reproduced below:-
(i)    The main controversy in this case revolves around the point weather local taxes are added in the values provided by CCIE]. This is a relevant consideration that requires attention in order to arrive at a definitive value for the impugned goods.
11.  As evident from the above the learned D.G. Valuation highlighted the issue that carried weight. It called for embarking upon redressing the area of concern by determining the value. Instead the matter has been remanded back to be resolved by the Director Valuation preferably within a period of 4 weeks, while the Review petition has been disposed of and the Valuation Ruling has been held to stay in field. There ought to have been determination afresh at the level of D.G. Valuation if there was weight in the Petitioner's submissions in order to provide due relief as contemplated under Section 25-D ibid. There is no any provision for remanding back the Valuation Ruling in the section ibid. The Ruling carries determined value and is not an order with in the legal parlance. The Review Petition does not constitute an appeal. As envisaged in section 25-D ibid it is a petition for revisiting the value determined in the Ruling before the higher forum of Director General. Therefore any areas found calling for redressing the concerns have to be redressed during the review proceedings. The shifting of task over to Director Valuation is not covered under section 25-D as it explicitly requires that DG Valuation may either rescind or determine the value afresh. The stipulation under section 25-D ibid is categorical; clearly aiming at resolution of the matter by the DG himself when section 25-D says that the Director General "determine the value afresh". If there was material calling for correct determination of value, it was the duty of the Respondent to set the process in motion afresh himself by using the available valuation mechanism in reference to the Chapter-IX of the Customs Rule, 2001 read with section 25 ibid along with any standing Operating Procedures to demonstrate that the Valuation Ruling has been meaningfully subjected to Review in an exhaustive manner reaching a conclusive determination so that the Tribunal being the appellate forum will have a thoroughly discussed / analysed and decided position in case any appeal is filed as is the case in the instant Appeal. The Director General is the original adjudication level and the Tribunal is the first appellate forum, therefore the order passed by the Director General must reflect not only a decisive view on the points raised but also the culmination of remedial measures as warranted in the matter so that in case of appeal the Tribunal can delve into the legality and approach adopted for the decision.
12.  In the light of foregoing discussion, we hold that the petition has not been properly Reviewed under section 25-D ibid. Therefore the Order in Revision is set aside to the extent of the above titled appellant and connected petition is remanded back to the Director General Valuation for carrying out exhaustive "Review" to discharge the obligation as stipulated under section 25-D ibid.
13.  The registry is required to send a copy of the order to the Director General Valuation, Karachi. The appellant is also required to immediately approach the relevant authority for pursuing the Review Petition.
14.  The judgment passed and announced accordingly.
Appeal allowed.